By Ahana Verma 
India’s technology story dominates the business headlines. Unicorns, IPOs, AI funding rounds these are the narratives that get attention. However, there is a quieter, larger story playing out simultaneously. And it deserves more recognition than it gets.
India’s engineering goods exports reached $122.43 billion in FY 2025–26. That is an all-time record. Furthermore, it represents 5% growth over the previous year’s record of $116.75 billion. Moreover, it was achieved against one of the most challenging external environments in recent history.
What Makes This Record Remarkable
The FY26 record did not come easy. In fact, it came despite significant headwinds. The West Asia conflict disrupted key shipping routes. Furthermore, the Trump administration’s tariff policies created uncertainty in the US market. Additionally, elevated freight and energy costs squeezed export margins throughout the year.
Nevertheless, India’s engineering sector delivered a record. Consequently, EEPC India called the achievement a testament to the sector’s resilience.
Even in March 2026 when one key sea route was disrupted by the West Asia conflict engineering exports grew 1.1% year-on-year to $10.94 billion. Therefore, the sector demonstrated the ability to grow through peak supply chain stress. That is not a typical outcome. It is a structural strength signal.
The Decade of Progress Behind the Number
The record is more impressive in context. Engineering exports have expanded from nearly $70 billion in FY2015 to $122.43 billion in FY2026. That is a 74% increase over twelve years. Furthermore, the sector’s share of India’s total merchandise exports rose from approximately 20% to nearly 28% over the same period.
Additionally, the growth has been three consecutive years of records $109.3 billion in FY24, $116.67 billion in FY25, and $122.43 billion in FY26. Therefore, the trajectory is consistent and structural, not episodic.
Pankaj Chadha, Chairman of EEPC India, attributed the record to both industry initiative and government policy. Specifically, the Market Access Initiative scheme, Production Linked Incentive programmes, National Single Window System, and strategic use of Free Trade Agreements all contributed to market diversification and competitive positioning.
The Geographic Picture
The United States remained India’s top engineering export destination. Specifically, exports to the US grew 2.3% to $19.60 billion in FY26 despite higher tariffs. That growth in the face of deliberate trade friction speaks to the price competitiveness and quality of Indian engineering products.
Furthermore, the European Union showed strong growth of 8.6% for the year. North America overall rose 1.9%. Meanwhile, shipments to MENA declined due to geopolitical disruption.
Consequently, India’s export diversification strategy deliberately targeting multiple geographies rather than depending on any single market proved its value in FY26. When one region faced headwinds, others compensated.
What This Means for India’s Industrial Economy
The engineering export story is not separate from India’s startup story. Instead, the two are increasingly linked. Specifically, AI for manufacturing quality control, supply chain optimisation, and predictive maintenance all backed by the SAP deeptech cohort and similar programmes are being deployed inside the same factories producing these export goods.
Moreover, the government’s Atmanirbhar Bharat push is creating domestic demand for India-made engineering components. As a result, the sector benefits from both export growth and import substitution simultaneously.
For entrepreneurs and investors, the $122 billion engineering export figure signals something important: India’s real economy is growing structurally. Therefore, the AI and software companies built to serve that economy have a growing, creditworthy, export-generating customer base to sell to.
Tags: India Engineering Exports, FY26 Record, EEPC India, $122 Billion Exports, India Manufacturing Growth, India Export Diversification, Engineering Sector India, Pankaj Chadha EEPC Author CTA: Follow Flairius News — sharp takes on AI, business, and India’s startup economy — flairiusnews.com
Raghav Sharma